Netbook wars continue in the midst of “consumer confusion”

As netbook sales continue to escalate out of sight, models and
manufacturers proliferate, and new platforms battle for supremacy in
the marketplace and in the minds of consumers and OEMs, analysts
continue to debate the suitability of netbook hardware to consumer
needs. NPD's most recent report on netbooks purports
to show, using direct user surveys, that consumers are highly confused
about netbooks, frustrated with their low performance, and typically
underuse their superb mobility. There are reasons for skepticism about
these results.

Fifty-nine percent of the 500 netbook owners surveyed say they purchased the devices primarily for mobility reasons, while 41 percent purchased them for the low price, NPD asserts. However, near to 60% of users admit to using their netbooks exclusively within the home, a figure which seems to imply that users are not making good use of netbooks' mobility.

NPD also claims that 60% of consumers who said they had purchased a netbook instead of a notebook were under the impression that "their netbooks would have the same functionality as notebooks." As a result of this confusion, a mere 58% of "cannibals" were satisfied with their purchases, as compared to 70% of those who had planned on a netbook from the start, who we might call "netbookers."

These numbers, taken as a whole, seem to imply that confused consumers are making the wrong choices and ending up with products unsuited to their needs. A report from another, less reputable firm in January concluded much the same thing, using a Web-dredging algorithm which sifted and parsed many thousands of online comments. We were skeptical about those results, and, for similar reasons, are skeptical about giving these results any deeper meaning.

Consider the mobility result. At least 20% of netbook users purchased their netbooks primarily for mobility, but don't even take them out of the house. This sounds bad, but it's easy to forget how much mobility can matter even in the home setting. On the couch, netbook users can avoid the power cord, lap weight, and reproductive health threat of a full-sized laptop. In the kitchen, a recipe, webpage, or song can be accessed without tying up lots of counter space. And although we can think of a fair few uses for netbooks in the bedroom, the browsing behavior displayed by Flickr user bitospud (left) is probably the most common.

Moreover, the NPD survey probably overestimates the percentage of purchasers who were gung-ho road warriors. Given only two alternatives, price and mobility, it's probable that users who preferred long battery life or glamorous aesthetics would choose "mobility." Even some cost-conscious consumers may—like Geo Metro drivers who only drive one for the gas mileage, or people who read Playboy for the articles—have substituted a convenient motivation for the true one.

Much more troubling is the high rate of "same functionality" perception. If people actually think that netbooks can do everything that notebooks can, consumer confusion is indeed rampant. However, there's a pretty compelling interpretation which keeps netbooks' noses clean. If, by "same functionality," respondents mean not "equivalent performance" but "equivalent utility for my limited needs," then this statement may indeed be true for upwards of 60 percent of users. The mere fact that users were considering either a netbook or a notebook indicates the second statement is true to some extent. And certainly, with smaller keyboards and screens at lower resolutions, no one could think netbooks have the exact same functionality as notebooks.

It's difficult to attach any particular significance to the satisfaction figures, because we don't know how they compare to rates of satisfaction with other products like laptops and smartphones. The comparison between netbookers and cannibals is unsurprising, because cannibals were at least considering the notebook, and thus needed at least some of the performance or size features of a full-sized notebook. Netbookers, by contrast, are probably using the systems as they were intended to be used, as secondary and tertiary computers. Even if the difference in satisfaction rankings is of great import for cannibals, it's likely that netbookers are the vast majority of respondents; there has been evidence from other surveys that most netbook owners use their netbooks as secondary computers.

While these results may bode ill for a small minority of users who make genuinely wrong purchases based on drastic misconceptions, the overall picture is unchanged. Netbooks, as secondary computers and with some degree of cannibalization, are steamrolling the x86 market with unprecedented speed, and will continue to do so for the foreseeable future, precisely because they meet consumer needs.

I've noticed a lot of people buying net books, using them for a month or so, and then either selling them or letting them collect dust so I believe NPDs data on this. I was excited about netbooks until I actually used one and realized it was too difficult to type on, the screen resolution was way too high for the display size, and the performance was just poor enough that I found my iPhone was a better device for the tasks I had originally bought the netbook for. I'd say any modern smart phone like Android, Pre, iPhone are all sufficient to handle what most people buy netbooks for.

That being said I do think many consumers will continue to buy them on price alone. The PC OEMs are terrified of doing cheap 13-15" ATOM based laptops as they would most likely cannibalize their mid-range notebook market even deeper than the current <11" netbooks have. If there's no other choice they'll buy the small netbook and live with it.

Is it wrong to want more performance out of a lightweight/portable long-lasting machine?

I'm not sure what the roadmap is for the Atom processor, but if Intel is actively trying to carve a separate niche to avoid canabalizing their "regular offerings", then I'd have to say that they're severely shortsighted.

I specifically bought a netbook to replace the notebook I was lugging back and forth to work every day. I was quite aware that it was anywhere near as powerful as my notebook but, by the same token, it was a more than adequate replacement for what I was using the notebook for - using Wordpad and Works9 word processor for a novel I'm writing, listening to music with WMP11 and surfing the web (YouTube and Hulu work fine). I can even, in a pinch, play Guild Wars - looks kind of ass but actually runs reasonable well, much to my surprise.

Nice thing is I'm now lugging a 5-pound bag around instead of a 11-pound one.

It's probably worth mentioning, that everyone I've seen with a Linux-based netbook was quite satisfied with the performance, but many of those with Windows-based netbooks (especially if they installed antiVirus, etc.) weren't so happy.

Similarly, I recall that Microsoft's definition of "netbook" (ie. qualifying for special-discount WinXP or Win7) basically amounts to "hardware that won't really run Windows very well".

I think that the main issue is that consumers are confusing netbooks and subnotebooks. A lot of people probably bought netbooks under the assumption that they were just "notebooks in smaller packages" and expected them to perform the same tasks as a full size computer.

In short it is clear to consumers that the physical size of the machine is smaller, but not that the computing power inside the machine is much smaller too.

Except for college students and workers who go to a lot of meetings, I am having trouble figuring what people are supposed to actually do with a netbook. Typing on a two handed keyboard doesn't work well unless you're sitting at a table or a desk. In college and at work, I see lots of desks and tables. Everywhere else, no so much. So the device is easier to carry around and ... not use very often? What's the point of this?

So now, among those of us who frequent desk-rich environments, we come to the question of who among us can productively use the smaller screen and reduced compute power. Personally I'm not one of of them; most of my work and play involves having multiple windows open simultaneously, which just isn't in the cards for a netbook until it's almost a notebook.

So what are the scenarios you netbookers actually use your netbooks for?

As an owner of a IBM Thinkpad, a Dell Lattitude and a Samsung NC10 I can tell you the Samsung netbook gets used 90% of the time both in my home and out. Most of the time I am either writing, surfing the web, playing music, etc. The NC10 does it as well as the others but weighs less and lasts over 6 hours on battery. Sure, I am not going to work on a massive spreadsheet on the NC10, but the Thinkpad isn't going to be much better. I want a massive desktop monitor for that kind of work. The Thinkpad runs Adobe Creative Suite which the netbook isn't even going to try. That is OK. It is not the right tool for the job. That is the crux of it. Having the right tool for the right job. Someone who doesn't know the difference from a tack hammer and a ripping hammer shouldn't be working on your house. Someone who doesn't know the difference between a netbook and a notebook shouldn't be making the computer purchases for a household.

I caught a glimpse of what a netbook could be with my OLPC. Now I'm waiting for a machine with similar battery life and screen quality with a larger screen and a more traditional GUI. This year perhaps?

Originally posted by Xander Skyrien:Is it wrong to want more performance out of a lightweight/portable long-lasting machine?

Performance, price, size. Pick two.

Bingo.

Non-tech-savvy users tend to fixate on a single spec with notebooks. Whether it's "memory" (could be the RAM or the hard drive) or GHz, it the system has that spec, the customer is sold.

In all fairness to the computer retail clerks out there, even the few that understand even simpler issues like the rotation speed of the hard drive are not going to be able to educate the consumer adequately standing in the aisle at Best Buy.

It seems that most netbooks sport the same or very similar hardware. It is true that variations in screen size and form factor present. However, if you load up brand x 10 inch netbook with all the options and then compare it to brand y, will we not have strikingly similar devices?

Screen size, battery life, price, and how much RAM can this thing hold, seems to be the questions to ask ourselves when purchasing these things, presently.

Though the new Lenovo S12 (utilizing the nvidia ion platform) might be interesting if the price point is low enough.

Originally posted by adminfoo:So what are the scenarios you netbookers actually use your netbooks for?

Price and mobility were my primary considerations. I orginally got mine so that I could sit next to my wife on the couch while she was editing video on our big ol' 17" laptop, spend time with her, but also websurf a bit, or do some writing. I wanted something small, light, long battery life, and didn't need it to do much, and given that I already own 3 computers and am not rich, it had to be cheap.

I paid less than $400 for an Eee PC, and it's been great for the intended purpose. Additionally, I've started using it for tabletop D&D I play on the weekends, loading up WotC's game client so I have lists of my character's abilites, various descriptions, and easy note-taking capability with an 8-hour battery life, which lasts my entire session unplugged. I've taken it into the kitchen once to look up recipes, rather than printing them out, and it worked fine, though I was a bit nervous about having electronics next to my cooking area...don't think the Eee PC would look very good splattered with sauce.

The term netbook has always seemed rather useless to me. The range of available notebook hardware is quite broad and there is a continuous spectrum of price vs functionality/performance.

Netbooks are simply small and cheap notebooks. Why a separate term caught on like wildfire, I'll never understand.

If there wasn't a separate term, unknowledgable consumers wouldn't get confused. They'd more fully realize that netbooks are cheap because netbooks are comparatively slow. The seperate term seems to imply that netbooks are somehow different, and that perhaps that is why they cost less. But no, they're just slow laptops that also happen to be small. With slowness also comes battery life, but to me that doesn't necessitate a separate term.

I use my netbook (Acer Aspire One) mostly around the house, surfing the web, light work (Cygwin and MinGW work OK on it, as do some work tools). It is light and small and I can do this on the sofa, in my office, or at the kitchen table. It is my only non-work provided home computer at the moment.

I thought I would travel with it more - but I do find my travel has a way of requiring heavier work - and my laptop with the 8800 graphics card (no not gaming, seriously, working).

I am satisfied, except for my battery life, which tends to be on the order of 1.5 hours.

If consumers were really as unhappy with their netbook purchases as NPD claims, they would be returning them almost as quickly as they're being purchased. Since that isn't happening, NPD is just plain wrong, again.

Originally posted by jerry_t:It seems that most netbooks sport the same or very similar hardware. It is true that variations in screen size and form factor present. However, if you load up brand x 10 inch netbook with all the options and then compare it to brand y, will we not have strikingly similar devices?

Er... no.

Even more than laptops, netbooks are a realm where design (read: ergonomics, configuration, build quality as a function of the design, etc.) rules. Is the keyboard going to be comfortable to type on? There's a huge range here. Is the trackpad/pointing device going to be comfortable to use? There's an even bigger range here. Is the case smooth and easy to slip in/out of the bag, or does it have odd indentations that hang up? How well is the case put together, and is it something I'm going to have to baby along? Are the ports arranged in a way that tempts a USB stick to snap off if I try to use it on my lap?

"Cannibals"? Really?? I assume that means netbook users who are "cutting into the sales" of more traditional notebooks? Seems like a terrible term.

I've heard "cannibalism" used in the sense of grabbing parts from one machine to use in another. e.g. I used to have a four-wheeler (quad bike, ATV, whatever) that wasn't in great shape, so I bought a cheap second one of the same model (also broken) from which to snag parts. I ended up bulding a single good-working vehicle.

Obviously that use ascribes intent inappropriately (the machine didn't "want" to "eat" the parts from the other), but it's quick shorthand. But for sales, I don't see how it applies at all, especially when the two machines being considered aren't even the same. WTF.

In 2005 I purchased a Dell Inspiron 700m. Its a very small 12" widescreen laptop with 1GB RAM, 60 GB HD, 1.8 GHz Pentium M. This thing is tiny, runs fairly fast, and has Vista Business running on it with no problems. I really see no reason to get a netbook when small notebooks are available, but that's only from my perspective.

Originally posted by mathrockbrock:"Cannibals"? Really?? I assume that means netbook users who are "cutting into the sales" of more traditional notebooks? Seems like a terrible term.

I've heard "cannibalism" used in the sense of grabbing parts from one machine to use in another. e.g. I used to have a four-wheeler (quad bike, ATV, whatever) that wasn't in great shape, so I bought a cheap second one of the same model (also broken) from which to snag parts. I ended up bulding a single good-working vehicle.

Obviously that use ascribes intent inappropriately (the machine didn't "want" to "eat" the parts from the other), but it's quick shorthand. But for sales, I don't see how it applies at all, especially when the two machines being considered aren't even the same. WTF.

I can understand the confusion, especially if you haven't been keeping up with the netbook analysis scene.

"Cannibalization" is the process by which a cheaper product, when introduced, sells instead of a more expensive one from the same vendor, reducing their profitability even though sales of the one product are brisk. For instance, Apple may worry that the xMac would cannibalize the Mac Pro. In this case, every major vendor of laptop, along with Intel and MS, are worried terribly that netbooks will cannibalize notebook sales. In this circumstance, it seemed logical to refer to someone who cannibalizes as a "cannibal."

I meant no comment on the morality of their actions, the actual similarity of the devices involved, or their taste in food. I just needed a term for that group of people and was being playful.

Ah, you're using it in the sense of two products from the same vendor. I suppose that's slightly less ridiculous.

Maybe I'm just surprised that there wasn't already a term for it, since the principle as you describe could certainly apply to cars or other older tech. I mean, are people who buy a BMW 3-series "cannibalizing" the sales of the more expensive M5? I thought that was intentional diversification on the part of the automaker, since not every customer has the budget or performance needs for the high-end model. Are you saying for computers vendors, it's accidental?

Originally posted by mathrockbrock:I thought that was intentional diversification on the part of the automaker, since not every customer has the budget or performance needs for the high-end model.

The important word here is 'budget'. While people may not have the money to buy a car like that, it's apparent that many people WILL spend the money for a full-blown laptop when a smaller, cheaper device is simply not available. With cars, people without the budget would simply not buy the M5. At least that's how I understand it.

Originally posted by mathrockbrock:Ah, you're using it in the sense of two products from the same vendor. I suppose that's slightly less ridiculous.

Maybe I'm just surprised that there wasn't already a term for it, since the principle as you describe could certainly apply to cars or other older tech. I mean, are people who buy a BMW 3-series "cannibalizing" the sales of the more expensive M5? I thought that was intentional diversification on the part of the automaker, since not every customer has the budget or performance needs for the high-end model. Are you saying for computers vendors, it's accidental?

Same vendor is traditional, although same product space is also used. There is a tragedy-of-the-commons dynamic here, where each individual vendor has an incentive to push cannibalization of the product space as long as they themselves benefit from the netbook space, while as a whole vendors do fear cannibalization. I'll cover this in depth one of these days.

I have both a notebook (15" Compaq) and a netbook (Dell Mini 9). I use the netbook around the house to answer emails and surf the web while watching TV (it's nice to be able to go an entire evening without having to be tethered to a power brick.) If I were to go on a trip, I would probably take the netbook just because it takes up less space (which would make it ideal for that squinchy airplane tray table) and has better battery life. I don't have an illusions about being able to play video games or do serious graphics or engineering work on the netbook (but I will push the limits occasionally to see what they are.)

It's hard to feel sorry for someone who didn't do any research before buying something they know nothing about. I mean, it's highly unlikely anyone in marketing/sales really knows anything about computers, so I can understand why consumers are confused. Yet, computer geeks make horrible sales people. So, just advise your non-geek friends to spend 20 mins online to google "netbook vs notebook" and read a few articles.

Originally posted by adminfoo:So what are the scenarios you netbookers actually use your netbooks for?

I've used mine for all of the following multiple times in the last few months.

1) Note taking (and ssh-ing to see examples and run code) in classes I might occasionally take.2) Web browsing on my own system while on travel for work (very important). - Also great when on vacation.3) Looking at PDFs of gaming books (DnD and the like) on the fly at games. - Also works for distractions when said games are dragging4) Accessing email and other data when over a friend or relative's house (especially when having to fix their computer / network / etc).5) Kitchen system for music / recipe look-up.

quote:

Originally posted by Janne:

quote:

Originally posted by Xander Skyrien:Is it wrong to want more performance out of a lightweight/portable long-lasting machine?

Performance, price, size. Pick two.

No real need to only pick two when we're so close to (or perhaps even past) the point where low-end system performance already exceeds what is required for the average person's usage habits. We're practically at the point where software devs can get paid by the hardware industry to not optimize their code so that we have a need for the average office system to not just be a netbook-level terminal.

I bought my netbook for what it's intended; accessing the internet. I got it for its light weight, cool operation, small size, long battery life and physical keyboard — to use instead of my iPod touch which is practically useless for the web and email. Performance mattered very little to me although the netbook is plenty fast.

I blame Intel. Intel puts extreme pressure on netbooks to limit RAM. Yes, 5 years ago 1 GB of memmory was plenty for Windows XP... but people don't use 5 year old programs on a new computer. The other thing though is quite frankly the Atom isn't really what I would consider production ready. yes, the cpu uses a lot less power, but the chipset for it is a hog. Plus XP and the linux distros that come with most netbooks just aren't designed for low power usage.

I don't think net books are eating away at higher end computers. Because there are generally two catagories of people who get a netbook. One are the geeks who get it as a toy almost, and the other are people who quite frankly wouldn't have spent the money on a higher priced notebook to begin with. I think that's why most of them are being used at home. Why buy a $300 - $400 dollar desktop, when you can get a $300 portable. If there were no netbooks, i'd guess most would have bought a cheap desktop instead of a notebook.

Just for kicks I brought out my old computer that has an Athlon64 and 768 MB of memmory. When running the programs that were still on it from who knows when it ran really spiffy. Much faster than my grandma's new computer with all the crapware Dell installed on it.

But after updating it, and installing new programs on it it didn't run so fast. I ended up putting Linux on it, and the exact same thing when running the popular distros. It was somewhat faster than XP, but still a little slower. On the bright side, if you knew where to look you could replace the default apps with less bloated ones... but if your're new to Linux it's hard to know even where to begin since all you have is the package manager... like finding a needle in a haystack.

Personally I'm going to recommend people to get something like a smart book. Just because people will know what they are getting. It won't be as powerful as a netbook, but their expectations will be lower and happier in the end. Plus they are designed from the ground up for low power situations, whereas the netbook is still carries lots of baggage from an architecture designed for desktops first.